1.What is accounts receivable?

a. The money a company owes to its employees

b. The money set aside for future investments
c. The money a company expects to receive from its customers
d. The money a company owes to its suppliers
2.The aging of accounts receivable is a process used to:
a. Analyze and categorize outstanding customer balances by their age
b. Assess the value of intangible assets
c. Determine the creditworthiness of suppliers
d. Calculate depreciation on fixed assets
3. What is the typical term used for the maximum number of days allowed for customers
to make payment on their accounts receivable?
a. Net terms
b. Net present value
c. Net assets
d. Net days
4. What financial metric measures the average number of days it takes for a company to
collect its accounts receivable?
a. Accounts Receivable Turnover
b. Current Ratio
c. Accounts Payable Turnover
d. Quick Ratio
5. When a company sells its accounts receivable to a third party for immediate cash, it
is known as:
a. Depreciation
b. Leasing
c. Factoring
d. Amortization
6. What is the allowance for doubtful accounts?
a. A line of credit for customers with good payment history
b. A discount given to customers for early payment
c. A reserve set aside for potential losses on accounts receivable
d. An expense incurred when accounts are collected
7. The accounts receivable turnover ratio measures:
a. How quickly a company can pay off its debts
b. The company's overall profitability
c. The ratio of accounts receivable to total assets
d. How efficiently a company collects payments from customers
8. If a customer returns a defective product and is granted a refund, how is this typically
accounted for in accounts receivable?
 a. Not recorded at all
b. Recorded as an increase in accounts payable
c. Recorded as a decrease in accounts receivable
d. Recorded as an increase in accounts receivable
9. What is the primary purpose of accounts receivable management?
a. To efficiently manage and collect outstanding customer balances
b. To improve the company's credit rating
c. To minimize the amount of accounts receivable
d. To maximize the number of customers on credit
10. Which accounting method records accounts receivable when they are likely to be
collected and reflects the most accurate financial position?
a. Revenue basis accounting
b. Cash basis accounting
c. Modified cash basis accounting
d. Accrual basis accounting
11. In a situation where a company sells account receivable to a factor, which financial
metric is likely to be impacted the most?
a. Return on equity
b. Current Ratio
c. Net income
d. Accounts payable turnover
12. What accounting principle requires that accounts receivable be recorded at their
estimated collectible amount?
a. Revenue Recognition Principle
b. Matching Principle
c. Historical Cost Principle
d. Conservatism Principle
13. When using the aging of accounts receivable method, why are older accounts
considered riskier?
a. Older accounts are more likely to be paid on time.
b. Aging has no impact on the riskiness of accounts.
c. Older accounts have a higher estimated collectible amount.
d. Older accounts have a lower estimated collectible amount.
14. What is the primary focus of the Direct write-off method for accounting for
uncollectible accounts?
a. Predicting the aging of accounts receivable
b. Matching expenses to revenues
c. Recognizing the exact amount of uncollectible accounts when known
d. Estimating the allowance for doubtful accounts
15. When using the percentage of credit sales method to estimate bad debts, which
financial statement is most affected?
a. Income Statement
b. Statement of Cash Flows
c. Balance Sheet
d. Statement of Retained Earnings
16. Which of the following is a drawback of factoring accounts receivable?
a. Improved cash flow for the company
b. Lower financing costs compared to traditional loans
c. No impact on the company's financial statements
d. Loss of a portion of the receivables' face value
17. A written promise to pay a specific sum
18. Maturity date
19. Notes receivable are for longer terms
20. It is calculated as a percentage
21. The principal amount sucked in the note
22.If a company discounts a note receivable with a bank before its maturity date, which
of the following is true?
a. The note is extended to a later maturity date.
b. The bank buys the note for less than its face value.
c. The company receives the full face value of the note.
d. The bank buys the note for less than its maturity value.
e. The note's interest income is forfeited.
23. increase company assets
24. Borrower failed to make payments
25. What is the main difference between a non-interest-bearing note receivable and an
interest-bearing note receivable?
a. Interest-bearing notes are riskier than non-interest-bearing notes
b. Non-interest-bearing notes are more common in business transactions.
c. Interest-bearing notes accrue interest over time, while non-interest-bearing notes
do not.
d. Both types of notes are identical.
26. Revenue recognition principle
27 interest rate lower
28 adjusting for the time
29 fair value is the present value
30 the note has been paid in full
31 increase in market increase in fair value
32 existence
33 confirming with customers
34 to obtain independent
35 appropriateness
36 existence
37 confirm existence
38 obtain evidence
39 confirm completeness
40 existence (di ko sure)
41 reviews shipping
42 evaluate rights( d ko sure)
43 assess completeness
44 valuation (not sure)
45 assessing adequacy
46 rights and obligations
47 reviewing
48 draw conclusions
49 ensure
50 obtain

31. What impact does a change in the market interest rate have on the fair value of a
note receivable?
A. An increase in market interest rates, increases the fair value
B. A change in market rates has no impact on fair vlue
C. A decrease in market interest rate, increased the fair value
D. Fair value is determined independently of market interest rate
32.
33. When auditing accounts receivable, which of the following is a substantive
procedure typically performed by auditors?
a. Confirming accounts receivable with customers
b. Checking internal controls related to receivables
c. Observing the counting of cash in the company's safe
d. Vouching recorded transactions to source documents
34. In the audit of receivables, what is the primary purpose of confirming receivables
with customers?
a. To evaluate the company's internal control procedures
b. To obtain independent, external evidence of the existence and validity of
receivables
c. To verify the accuracy of the allowance for doubtful account
d. To assess the completeness of recorded transactions
37. What is the primary objective of substantive analytical procedures during the audit of
accounts receivable?
 a. To identify unusual or unexpected fluctuations in the accounts receivable balance
b. To assess the rights and obligations assertion
c. To test the effectiveness of internal controls
e. To confirm the existence of recorded receivables

37. What is the primary objectives of substative analytical procedures during the audit of
accounts receivable?
A. To indentify unusual or unexpected fluctuation in an accounts receivable balance
B. To assess the rights and obligations assertions
C. To test the effectiveness of internal control
D. To confirm the existince of record receivables
40. Which assertions is auditor primarily concerned and when evaluating the rights nd
obligation related to receivables?
A. Presentation amd disclosure
B. Completeness
C. Valuation
d. Existence
41 reviews shipping
42 evaluate rights( d ko sure)
43 assess completeness
44 valuation (not sure)
45 assessing adequacy
46 rights and obligations
47 reviewing
48 draw conclusions
49 ensure
50 obtain